Burlington Stores' Shutters Stores Due To Coronavirus Fear
Zacks Investment Research | Mar 22, 2020 10:32PM ET
The outbreak of the novel coronavirus compelled the renowned off-price retailer, Burlington Stores, Inc. (NYSE:BURL) , to announce the closure of all stores. The shutdown, which is scheduled to last for a temporary period, came in effect from Mar 22. Moreover, management announced that the company will be providing financial aid for a period of two weeks to its affected associates.
We note that rising concerns related to the COVID-19 pandemic have derailed the economic activities globally. Companies are bearing the brunt of supply-chain bottlenecks due to travel restrictions imposed to contain further spread of the deadly virus. The outbreak has caused people in most cities to stay indoors, resulting in lower store traffic. The deadly virus has infected more than 290,000 people worldwide and the death toll has crossed 12,500.
Well, other retailers like The TJX Companies, Inc. (NYSE:TJX) , Kohl's Corporation (NYSE:KSS) , Macy’s (NYSE:M) and Dollar Tree (NASDAQ:DLTR), Inc., have been taking various actions to support the economy during the COVID-19 crisis.
TJX Companies announced temporary store closures across the United States, Canada, Europe and Australia, among other countries. Kohl's has shut down all its stores — roughly more than 1,100 — effective Mar 19 till at least Apr 1. Macy’s closed all stores nationwide from Mar 17 till 31. Moreover, Dollar Tree recently announced its plan to hire 25,000 full and part-time associates at various stores and distribution centers in the United States to better serve its customers amid the coronavirus crisis.
Coming back to Burlington Stores, it has been doing quite well on the revenue front. In fourth-quarter fiscal 2019, net sales advanced 10.5% year over year. Meanwhile, comparable store sales rose 3.9% in the fourth quarter. Comps growth was mainly backed by a rise in units per transaction with AUR and a marginal increase in conversions. Notably, this was the 28th successive quarter of comparable store sales growth.
Moreover, this Zacks Rank #3 (Hold) company is on track with its initiatives. Management is on track with making higher investments in merchandizing capabilities, operating with leaner inventories, enhancing operational flexibility and controlling costs.
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